Internal audit

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Samir

Samir (Querist)

16 April 2009 When is internal audit compulsory for private limited companies?

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)

16 April 2009 Internal Audit is comuolsory for Compnies having turnover morethan specified limit. And According to CARO,2003 companies are required to give additional details as specified in format perscribed by the order. It shall apply to every company including a foreign company as defined in section 591 of the Act,except the following:-(i)a Banking company asdefined in clause (c) ofsection 5 of the Banking Regulation Act, 1949 (10 of1949);(ii) an insurance company as defined in clause (21) ofsection 2 of the Act;(iii) a company licensed to operate under section 25 ofthe Act; and(iv) a private limited company with a paid up capital and reserves not more than fifty lakh rupees and has notaccepted any public deposit and does not have loanoutstanding ten lakh rupeesor more from any bank or financial institution and does not have a turnoverexceeding five crore rupees.

Manmohan ACA, CS

Manmohan ACA, CS (Expert)

16 April 2009 NO internal audit not compulsory for private compamy, as per the CARO requirement all company to which CARO applies need to specify, whther Internal Audit of compnay is conducted or not. If a company does not want it can escape from internal audit
It is recommandatory by CARO (to which CARO applies), it is not mandatory.

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